Banks in Canada have been joining forces with fintech companies to spur industry growth, according to a new report by PricewaterhouseCoopers (PwC).
The report states that big banks across Canada are responding to the opportunities and threats posed by fintech companies. These companies have managed to enter the lending market by combining technology and online data to offer sought-after products and services such as business and personal loans to individuals and enterprises.
The country currently boasts more than 80 fintech companies, most of which are based in Vancouver, Toronto and Waterloo. PwC states that these companies have already attracted about $1 billion in investments since 2010. OnDeck, a small business lender from New York, has already entered the Canadian market, along with Avant, a near-prime lender from Chicago.
The PwC report states that some fintech companies are collaborating with banks on innovation, while others will present a threat as they conquer the traditional market territories of banks. The report goes on to highlight that if banks in Canada do not keep up with the offerings of these firms, they risk losing their market share. However, the report believes that Canadian banks and fintech firms will ultimately collaborate, with banks using the expertise of fintechs to their advantage. At the same time, banks in Canada will concentrate on internal innovation to compete with fintechs.
Canadian banks have already forged partnerships with fintech companies. Canadian Imperial Bank of Commerce has joined forces with MaRs to create a corporate innovation hub, and it also has a referral partnership with small business lender Thinking Capital. Similarly, Royal Bank of Canada has a partnership with Uber for loyalty rewards and is testing payment technology with the help of Nymi Wristbands.
PwC believes that fintech companies are currently peripheral players, and this allows them some leeway to function without the same constraints that banks have. However, as these companies grow and expand, they will come under the purview of the regulatory authorities.
Fintech companies are a boon to Canadian small business owners who may be unable to approach traditional lending institutions. With lenders like Lendified helping small business owners get access to funds very quickly, entrepreneurship in Canada has received a major boost. However, entrepreneurs will also benefit from an MBA degree that will prepare them to address the challenges that come their way when they start their own ventures.
The UCW MBA program teaches graduates essential business skills for succeeding in a highly competitive business environment. UCW MBA graduates have the ability to respond strategically to business opportunities and challenges and use critical thinking to come up with sound business decisions. They are also prepared to partner and work with diverse teams, paving the way for success in a global economy.